'It doesn’t get easier, you just go faster': The 25-year-old co-founder of Stripe on running a $5 billion startup

"You could use many adjectives to describe Silicon Valley, I
don’t think normal is one of them. I think there is this very
nice, if at times dangerous, untethered optimism that exists in
Silicon Valley. But it is also what causes some of the issues." —
John Collison, co-founder Stripe.

The 4-year-old San Francisco company builds tools for businesses
that lets them easily accept and track online payments, managing
things like integration with banks and online systems.

Its developer friendly approach has made it hugely popular with
the new generation of tech companies and Stripe powers payments
for high-profile mobile and web business like ride hailing app
Lyft and online grocer Instacart in the US.

But he also opened up about criticisms of Silicon Valley,
competition with PayPal, his view on whether we're in a tech
bubble, and what it's like to live and work so closely with his
brother. Check out the edited highlights of the talk below.

Business Insider: In terms of Relay, I find the idea of
social commerce very interesting. Can you talk about how you see
that evolving?

John Collison: Sure. Social commerce sounds kind of out there.
However, if you go and talk to literally any retailer out there
they will give you the foundational pitch for relay, which is
that mobile commerce is really broken right now.

An
example of a Stripe Relay buy button on
Twitter.Tech
Insider

You look at the data — and these are US figures but I think it’s
pretty similar here — and retailers are seeing 60% of browsing
happening on mobile but only 15% of purchasing. If you’re a
retailer that’s kind of terrifying. You’re seeing all your
customers go to this new platform that performs much worse.

Relay is an attempt to help solve this where merchants can say
these are the products that I have available for sale and then
apps like Twitter and Shopstyle, which was another one of our
launch partners, can build really nice buying experiences. You
start out in a tweet, you click into it, you tap buy and that’s
it.

One of the things we noticed was people spend a huge amount of
time in these apps — Twitter, Pinterest — so if they buy one
thing, they’ll probably buy many, many more things. That’s where
it all started. [But] it’s not just social networks.

BI: In terms of the social aspects you partnered with
Twitter, Pinterest — is it Facebook as well?

JC: Yup, we’re working with Facebook on some of their commerce
stuff.

BI: What about Snapchat?

JC: Any company that is as fast growing as Snapchat and has such
engaged users has to be interesting but we’ve got nothing to
share on that.

BI: What metrics can you share on revenues, transaction
volumes, and customers?

JC: Unfortunately we don’t publish numbers. What we do share is
we’re in 22 countries and have 10s of 1000s of customers who are
in aggregate processing billions of dollars each year.

Stripe
co-founders and brothers Patrick & John
Collison.Stripe

BI: Anything you can share on growth rates?

JC: No, we don’t share that either.

BI: And are you profitable?

JC: We don’t share that either.

BI: How many staff do you have now?

JC: 320 or so, it changes literally everyday. The US is our
largest market but then we have offices in London, Dublin,
Melbourne. The UK is doing really well, it’s the second largest
market after the US. The kinds of companies that do best on
Stripe are tech forward so we have lots of the UK tech companies
— Deliveroo, Nutmeg.

BI: Where’s your fastest growing market?

JC: The UK is doing very well, it only recently became our second
biggest market. Australia is doing really well. If you look at
the month-over-month growth rates it’s obviously the newer
markets — we’re beta testing in Mexico, Hong Kong, Singapore.
Those will always perform best because the denominator is zero,
or close to it.

BI: You guys seem to be doing really well but what are
the biggest challenges you face?

JC: Probably everyone says this to you but it’s true — hiring. If
you think about it we’re 300 people now, we’ll probably double
headcount in the next year. The Stripe we’ve spent 5 years
meticulously putting together, we need another one of those in
the next year.

Similarly, adapting the company to work effectively at different
sizes is always really a challenge. Stripe will have to be a
different company at 100 versus 200 versus 400 people. It doesn’t
just scale up evenly. You need to think carefully about the
balance of the company and how teams work with each other.

When it comes to the product and the market in particular — [long
pause] — one big challenge is the world changes so quickly around
you. 10 years ago the iPhone didn’t exist. Nobody cared about
buying on phones. You could buy a Domino's Pizza on your WAP
phone but it was very much proof of concept.

You have to continue to earn that success year after year

Similarly, a little over a year ago Apple announced Apple Pay,
Google’s announced Android Pay. These are awesome but completely
new methods of paying for things. I think the challenge for all
technology companies is to modify what they’re doing to be what
the market needs at that point. You see examples of technology
companies failing to do this — if you look at eBay they still
feel very much like a desktop site. Nokia, the smartphone thing
completely passed them by.

It’s really easy for technology companies once they’ve reached a
modicum of success to feel very satisfied and rest on their
laurels. You have to continue to earn that success year after
year after year. There’s a quote by a famous cyclist, I think
it’s Greg LeMond: “It doesn’t get easier, you just go faster.” I
think that’s very fitting for a lot of technology companies.

BI: There’s a big conversation now about whether we’re in
a bubble. You guys are obviously one of the unicorns. What’s your
position on it?

JC: [Long pause] Maybe a few notes. First, I don't think you can
say very simply that a company that has raised private money at a
certain valuation that it is worth that, because private
valuations are of a particular type and they’re different to,
say, public valuations. You need a bit more understanding of
what’s going on and I don’t think either companies raising money
or investors in companies are making a statement that companies
are worth that.

I don't think you can say very simply that a company that has
raised private money at a certain valuation that it is worth
that.

The second thing is, I think there are almost certainly some
overvalued companies and some undervalued companies out there.
The question you’re really asking is, "Is there something
systemic?" That’s a really hard question, I don’t know.

I will say I think there are lots of companies that are
generating very real revenues with very real businesses that feel
like they’ll do completely fine. If you look at Airbnb, they’re
solving a very real problem. Same with Slack, I would argue same
with companies like Stripe. The problems are real and the
products are good at solving them.

BI: I’ve noticed PayPal have recently upped their game.
Shoreditch High Street station [local to BI offices and near
where we met] is absolutely plastered with adverts for Braintree
[PayPal’s rival developer-friendly payments business]. Is that
something you’ve noticed and how seriously do you take the
threat?

JC: Yeah I’ve seen the ads. I think … what do I think? [Pause] I
think fundamentally people make a decision based on the quality
of the product and I think the thing that PayPal, and to some
extent Braintree, have been struggling with is what people need —
the best tools for setting up a business — they traditionally
haven’t provided.

They’re trying to make sure they stay relevant. Advertising
obviously helps with awareness, but if you look at some of the
most successful companies they’re actually not generally
ad-driven when it comes to customer adoption.

BI: You mentioned Apple Pay and Android Pay. Is that
something that’s having an impact on your business already or
something you see developing over time?

JC: I don’t actually have overall numbers to hand but we see
merchants where Apple Pay is actually a quite significant
fraction of their total sales volume. If you look at the effect
it has on conversion funnels, it completely eliminates a large
data collection step. We are very bullish on Apple Pay and
Android Pay.

BI: You recently hired a CFO [Thrive Capital's Will
Gaybrick] — are you consciously beefing up the
management?

JC: Part of expanding a company is hiring really good managers
and leaders. CFO and COO are the ones who make the headlines but
I spend a huge amount of my time on hiring. There’s loads more
hires coming in the pipeline, including some senior ones.

Startups have this contrarian mindset. It's easy to take that too
far.

I think it’s quite important that companies take a humble posture
when it comes to building out teams and look to external experts.
I think startups have this contrarian mindset where we came in as
outsiders and totally reinvented how this stuff works and now
it’s great. It’s easy to take that too far and boil the ocean and
reinvent everything. I think that’s really dangerous.

You absolutely want to look to people who are experts in the
field and have done it before. When it comes to building
successful teams and organisations, that’s definitely something
you get better at over time. I don’t think anyone comes out of
the womb knowing how to manage large teams or build out a large
organisation.

BI: You raised under $100 million earlier this year — is
the next funding event and IPO, and if not, when’s the
IPO?

JC: I’ve got no interesting comments about a funding event. We’ve
got no plans for an IPO, no plans for future rounds of funding —
we do have plans, just, you know.

What the last round of funding was about for us was we had two
really great and very strategic investors to bring on — Visa and
American Express, who are obviously very big players in the world
of online payments. There’s a symbiotic relationship there where
we can help them improve the ecosystem online, help more people
use credit cards online, and they can help us in achieving that.

BI: Is that a way of saying you didn’t necessarily need
the money?

JC: I didn’t say that, but the thing we were most excited about
in the round was to bring them on board as investors.

BI: What’s the focus for you now?

JC: I would say it’s 3 things. One, Continuing to build our and
refine the team. We’re hiring and training up a large number of
people. Everyone always elides that second detail, which is
really important to making an organisation work well and setting
people up to succeed.

The second is continually improving the product set. Stripe
Connect is doing really well, we’re really happy with it. If you
start an online marketplace tomorrow Stripe Connect is by far and
away the best way to do that. Relay is just out the gate and
we’re still collecting data on that but the problem is totally
apparent.

Third is international expansion. We're Latin America and moving
further into Asia.

An
example of the Stripe dashboard for retailers to track
sales.Stripe

BI: You're 25 now, do you still feel young by Silicon Valley
standards? Is it fairly normal out there?

JC: You could use many adjectives to describe Silicon Valley, I
don’t think normal is one of them. I think there is this very
nice, if at times dangerous, untethered optimism that exists in
Silicon Valley. But it is also what causes some of the issues. I
didn’t answer your question.

BI: But that’s interesting, what issues do you see in
Silicon Valley?

JC: I think you see this class of problems where the innovations
that come out of not just Silicon Valley but also London — tech
hubs everywhere — have rippling effects on the real world. Uber
vs. the taxi companies is an obvious example of this. What I mean
by untethered optimism is Silicon Valley is very focused on the
upside and at times less connected to the downside.

BI: It seems like some of these guys have their head in
the clouds and they don’t seem to be willing to engage with, say,
a taxi driver who has lost 50% of his business because of your
product.

JC: Right. I wouldn’t say that in particular as that one [the
situation with Uber] is pretty complex, but that is the struggle.

I guess my point is that [the untethered optimism] is what makes
Silicon Valley so good, but it’s also a reasonable criticism that
it is producing so much change, which has positive and negative
effects all kind of mixed up.

BI: My original question was going to be how easy do you
find it to lead a normal life? Do you ever wish you were just a
normal 25 year old, if there’s such a thing?

JC: Yeah I would question the premise of that. I feel very lucky
in that Stripe is a problem that I think is really worth while to
be working on. I enjoy working both day-to-day and long-term. I
find it really fulfilling.

BI: Finally, what’s it like working and living with your
brother?

JC: I get on fine with my brother! It’s useful when you’re
working on a company with people in general to have a level of
trust that lets you have a productive working relationship.
That’s even important in companies where the management are not
brothers. I think the most useful thing about it is we’re able to
spend all of our energy on moving the company forward.